1st Circuit B.A.P. Decision on Implied Acceptance

12 Mar 1st Circuit B.A.P. Decision on Implied Acceptance

The 1st Circuit B.A.P. recently reviewed the case of In re Flynn, Case No. 07-15470-WCH, in which Massachusetts Bankruptcy Judge Hillman denied confirmation of a Chapter 13 plan containing a balloon payment provision. Judge Hillman denied confirmation of the plan even though the affected mortgage creditor had not objected to it. Acting sua sponte, the Judge stated that the creditor’s failure to object could not be construed as implied acceptance of the plan because the creditor had a reasonable expectation that the court would not confirm a plan with a balloon payment. The BAP in its decision (available here) disagreed and held that a properly-served creditor’s failure to object constitutes acceptance of a plan.

See also: 1st Circuit B.A.P. Rules on Balloon Payments

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